The Cold War/The Marshall Plan and the Reconstruction of Europe

Europe, after being hit by the biggest war in history, was devastated. Its economies were bankrupt, food supplies were at an all-time low and there was a severe lack of industrial output, due to the destruction of factories by heavy bombing during the war. The Communist parties in Western Europe were gaining popularity and it seemed likely that the people would elect them if living conditions didn't improve soon.

This situation alarmed the Americans, who were desperate to guard their sphere of influence against the increasing threat of communism. In June 1947, the U.S. Secretary of State, George C. Marshall (a war veteran) announced at Harvard University, Massachusetts, that the USA would provide economic aid and equipment to help the economies of Europe recover and rebuild themselves. This came to be known as the "Marshall Plan".

The offer was open to the USSR and other Eastern European nations, but Stalin rejected it, saying that that the aid was politically motivated. He thought that the Marshall Plan was an attempt by the USA to win the hearts and minds of the people in the Soviet sphere of influence so that they would support the capitalist West.

A total of $13 billion was spent over a period of four years on 16 countries in Europe. This helped in rapidly speeding up the recovery of the continent, and between 1948 and 1952, Europe enjoyed its fastest ever growth in its history. Living standards improved dramatically and large scale extreme poverty was eradicated.

Politically, the Marshall Plan reduced the influence and power of Communist parties in Western Europe. The United States gave Europe a huge help in their economy which helped reconstruct after the war. But because the United States had helped European nations, the USA had an advantage. This angered the Soviet Union and was seen as another anti-communist move by the USA, following the Truman Doctrine. Both these acts drove the divide between East and West even deeper and convinced the world that a new political conflict, between the Soviet Union and the West, had begun. The Marshall Plan caused the Cold War to become a reality in the lives of the people of the countries involved.